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EU Divided Over €140 Billion Reparations Loan for Ukraine Using Frozen Russian Assets
European Union leaders remain at odds over an ambitious plan to use frozen Russian assets to fund a €140 billion loan for Ukraine, after Belgium blocked the proposal during a summit in Brussels this week. The initiative, designed to finance Ukraine’s military and reconstruction needs for 2026 and 2027, has become a major test of Europe’s political unity and financial resolve amid waning U.S. support for Kyiv.
The proposal would see the EU issue a “reparations loan” backed by roughly €185 billion in immobilised Russian central bank assets held at Euroclear, a Brussels-based securities depository. The funds, frozen since 2022 under Western sanctions following Moscow’s full-scale invasion of Ukraine, currently generate billions in annual windfall profits for Belgium.
However, Belgian Prime Minister Bart De Wever halted progress, citing fears of Russian retaliation and potential legal fallout. Belgium maintains an investment treaty with Moscow that could expose it to international arbitration if the assets are transferred. “If you take the money from my country and it goes wrong, I am not able—and certainly not willing—to pay €140 billion,” De Wever said after the summit. “Those who support this decision must guarantee that the solidarity will be there if things go sour.”
Despite the setback, EU officials agree on the goal: to make Russia, not European taxpayers, pay for the destruction in Ukraine. What remains unresolved is how to do it legally and safely.
Under the plan, Euroclear would transfer the cash to the European Commission, which would then issue the €140 billion loan to Ukraine in tranches tied to spending conditions, such as using the funds to purchase European-made equipment. Ukraine would only begin repayment after Russia ends the war and agrees to pay reparations, allowing Euroclear to eventually reimburse Moscow—a structure Brussels insists does not amount to confiscation.
European Central Bank President Christine Lagarde has warned against any move that could be seen as seizing sovereign assets outright, but has indicated the reparations loan might be feasible with more technical safeguards. EU leaders are also calling for transparency about how much each member state holds in frozen Russian funds and how profits are being used.
Germany and the Netherlands expressed sympathy for Belgium’s concerns but stressed the need for shared risk across the bloc. Hungary has already said it will not participate. French President Emmanuel Macron said technical issues must be resolved but insisted the project remains “on the table.”
With the U.S. scaling back financial support, Europe faces mounting pressure to find long-term solutions. The European Commission is expected to present an updated proposal before the next summit in December, seen as the deadline for a breakthrough.
Ukrainian President Volodymyr Zelenskyy, addressing EU leaders by video, urged swift action. “Ukraine will need this funding at the very beginning of 2026,” he said. “Not everything depends on us—it’s a political decision.”
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Pakistan Signals Near-Completion of US-Iran Peace Deal as Negotiations Intensify
Pakistan’s Prime Minister Shehbaz Sharif said on Saturday that a proposed peace agreement between the United States and Iran was closer than ever to being finalised, with expectations that it could be completed within 24 hours. His remarks came amid heightened diplomatic activity involving multiple regional and international actors working to bridge long-standing differences between Washington and Tehran.
Iranian state media reported on Sunday that Tehran had not yet reached a final decision on the draft agreement aimed at ending tensions between the two countries. The uncertainty followed a series of statements suggesting that progress had accelerated significantly in recent days.
US President Donald Trump also indicated on Saturday that a deal was within reach, echoing optimism from mediators involved in the process, including Pakistan. In a post on his Truth Social account, Trump stated that the agreement was scheduled for signing the following day. He added that once completed, the Strait of Hormuz would be opened for unrestricted passage.
“Hopefully, this process will all work out quickly, easily, and smoothly. If it doesn’t, we have the ultimate alternative, hopefully never to be used again,” Trump said, while also emphasizing that the arrangement would prevent nuclear escalation.
Prime Minister Shehbaz Sharif, speaking earlier on Saturday, described the situation as being at its closest point to resolution. He said Pakistan was preparing for an electronic signing ceremony once final agreement was reached. According to his statement on X, technical-level discussions would continue in the days following the signing to ensure implementation of the deal’s provisions.
Diplomatic engagement continued on Sunday when a Qatari delegation arrived in Tehran. According to Iran’s Tasnim news agency, the delegation’s purpose was to review the latest developments related to the ongoing diplomatic process and maintain momentum in negotiations.
Central to the proposed agreement is Iran’s commitment to fully reopen the Strait of Hormuz, a critical maritime passage for global oil and gas shipments. Another key condition involves curbing Tehran’s nuclear program, which has been a longstanding point of contention in its relations with Western powers.
While optimism has grown among mediators, Iranian authorities have not confirmed final approval, leaving the outcome uncertain. Negotiations are expected to continue as involved parties attempt to resolve outstanding issues and move toward formal agreement.
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